Magnetotactic bacteria (MTB) are a group of Gram-negative microorganisms that are able to sense and change their orientation in accordance with the geomagnetic field. This unique capability is due to the presence of a special suborganelle called the magnetosome, composed of either a magnetite or gregite crystal surrounded by a lipid membrane. MTB were first detected in 1975 and since then numerous efforts have been made to clarify the special mechanism of magnetosome formation at the molecular level. Magnetosome formation can be divided into several steps, beginning with vesicle invagination from the cell membrane, through protein sorting, followed by the combined steps of iron transportation, biomineralization, and the alignment of magnetosomes into a chain. The magnetosome-chain enables the sensing of the magnetic field, and thus, allows the MTB to navigate. It is known that magnetosome formation is tightly controlled by a distinctive set of magnetosome-associated proteins that are encoded mainly in a genomically conserved region within MTB called the magnetosome island (MAI). Most of these proteins were shown to have an impact on the magnetism of MTB. Here, we describe the process in which the magnetosome is formed with an emphasis on the different proteins that participate in each stage of the magnetosome formation scheme.